The present study investigated the effect of polyherbal formulation on streptozotocin (STZ) induced diabetic mice by measuring body weight, blood glucose, triglyceride, SGOT, SGPT, alkaline phosphatase, cholesterol, creatinine, uric acid and total proteins. Polyherbal formulation contains drugs from ten different herbs viz., Allium sativum, Trigonella foenum graecum, Momordica charantia, Aloe vera, Gymnema sylvestre, Cinnamomum zeylanicum, Pterocarpus marsupium, Murraya koenigii, Punica granatum and Phyllanthus amarus respectively. STZ produced a significant increase in blood glucose, triglyceride, SGOT, SGPT, alkaline phosphatase, cholesterol, creatinine, uric acid and total proteins. Treatment with polyherbal formulation (100mg/kg) for 30 days produced significant decrease in STZ induced serum glucose and other biochemical parameters in diabetic mice. Based on this study we can conclusively affirm that poly herbal formulation represents a good candidate for alternative and/or complementary medicine in the management of diabetes mellitus, since they exhibited beneficial effects on the blood glucose levels and associated biochemical parameters of STZ induced diabetic animals.